The recent news around VMware’s acquisition of SD-WAN provider VeloCloud raises questions about the carrier commitment to SD-WAN and the value of managed SD-WAN services.

VeloCloud: SD-WAN for Carriers

VeloCloud’s service provider focus was particularly significant for VMware. The deal “…signals a strong commitment to build deeper partnerships with communication service providers (CSPs),” writes Gabriele Di Piazza, the vice president of products and solutions at VMware in a recent blog.  

More specifically, Velocloud has

  • 50 service provider partnerships, the most of any pure-play, SD-WAN vendor.
  • delivers its SD-WAN appliances as a virtual network function (VNF) on universal CPE, a common infrastructure for service providers.  
  • strategically placed “gateways” allowing for a shared exit to private cloud infrastructure and traffic exchanges for VeloCloud suppliers to peer with another.

All totaled, the VeloCloud provides the components enabling even regional service providers to deliver a global SD-WAN services. Which makes the timing of the acquisition so surprising. At first glance, VeloCloud seemed like it was on the cusp of becoming a major player, but the acquisition price is rumored to be far lower than what Cisco paid for Viptela.

The Dr. Jekyll and Mr. Hyde of SD-WAN

Perhaps what VeloCloud realized is that services represent the future of SD-WAN in many ways, but carriers are not the ideal partners. The acquisition of SD-WAN vendor VeloCloud, is an indication that WAN edge technology is rapidly commoditizing and is essentially a feature in a network service provider offering. The true battle is for the future of network services for regional and global enterprises,” Shlomo Kramer, co-founder and CEO of Cato Networks,  wrote to me in an e-mail.

I’ve always been skeptical about buying an SD-WAN from a carrier or other traditional MPLS provider. SD-WAN carrier services often require you to have at least one of their circuits at your locations. As a result, you lose leverage to compel the carrier to improve the service experience.

By owning the SD-WAN you can easily switch carriers. It’s an enormous strength that we’ve rarely had before with enterprise network services. The other services of a carrier offering can be found through a combination

  • global SD-WAN services, such as Aryaka or Cato, that use any transport
  • solid local Internet access,  
  • independent WAN designers and implementers, and
  • third-party, SOC/NOC monitoring services

When you buy an SD-WAN service you give up control and become susceptible to the delays and overhead SD-WAN tried to eliminate.

To read the full post. visit my Network World column here.

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